New Trade for June 29th 2020

Futures were shaky last night and this morning with each of the four major indexes moving from red to green hours before the open.  We are expecting volatility this week as investors weigh the  Fed’s  monetary policy tools against escalating Coronavirus cases.  

This weekend we sent out a watchlist of EV stocks to consider.  We spoke about electric big rig maker Nikola’s (NKLA) meteoric rise, going public earlier this month via a reverse merger with  publicly traded SPAC, VectoIQ Acquisition Corp. 

 VectoIQ’s stock, which became Nikola’s on June 5, is up over 500% since that deal was announced in March, rising over 120% since the NKLA ticker appeared.  

Many investors are betting that the 20’s will be the decade that EV’s become mainstream and there is plenty to support that belief.  Major corporations have already begun moving towards carbon neutrality.  Amazon pledged carbon neutrality by 2040.  Microsoft has committed to be carbon negative by 2030.  Unilever announced its aim to be carbon neutral by 2039.  

It’s easy to see why investors have been so excited to get in on NKLA in anticipation of the major purchases of EV trucks which will be necessary as companies transition into carbon neutrality.  

Another merger was recently announced, presenting investors with another interesting stock to consider.  

Tortoise Acquisition announced its plans to merge with Hyliion next month, another company hoping to disrupt the heavy truck market with greener products.

Hyliion has two products.  One is a system that turns an existing diesel-powered heavy truck into a hybrid, increasing its range and efficiency.  The second is called Hypertruck ERX, is a complete electric drivetrain for Class 8 trucks which  is designed to be recharged while the truck is under way, via a natural-gas-powered generator or a hydrogen fuel cell.  

The reverse merger is set to take place in early July.   Tortoise will merge with Hyliion, the merged company will be named Hyliion, and the former Tortoise shares will trade under a new ticker, HYLN

SHLL stock is up over 140% since the merger was announced.  If Nikola’s story is any indicator, this stock could have plenty of room to run.